The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $74,000. The machine would replace an old piece of equipment that costs $19,000 per year to operate. The new machine would cost $9,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a scrap value of $31,000. The new machine would have a useful life of 10 years with no salvage value.

Required:

Compute the simple rate of return on the new automated bottling machine.

Simple rate of returnChoose Numerator:/Choose Denominator:=Simple Rate of Return/=Simple rate of return/=%